It is very likely for Bitcoin to reclaim $20,000, a level it achieved during the height of a notorious “ICO boom.”
The benchmark cryptocurrency underwent a parabolic bull run in late 2017 as speculators used it as a gateway to enter the then-exploding blockchain startup sector. Hoards of new firms issued securities-like tokens to raise operational funds via bitcoin and ether.
That created an artificial demand, which sent both the cryptocurrencies “to the moon.”
But then, more than 90 percent of those startups either turn out to be failures or outright scams. The tokens they had issued to investors crashed to zero. Additionally, those malicious projects sold their Bitcoin and Ethereum holdings en masse, thereby starting one of the most prolonged bear cycles in the history of the cryptocurrency market.
The New Bitcoin Boom
But the ICO boom and bust is now in the rearview. Bitcoin has recovered vastly since it bottomed out in $3,000 in December 2018, a level it again threatened to retest during the March 2020 global market rout, led by the coronavirus pandemic and the economic mayhem it caused.
The cryptocurrency, as of October 27, 2020, was trading 250 percent higher from its year-to-date low of $3,858. Unlike a shady ICO-led pump, Bitcoin’s recent gains emerged from accommodative policies of the global central banks. They together injected multi-trillion dollars into the economy to make lending cheaper and support the government and corporate debts via unlimited bond-buying.
The collateral damage of those stimulus packages was a weaker US dollar and an unattractive long-term bond market. Investors, therefore, moved a considerable part of their capital into assets that provided better yields. Bitcoin, a scarce asset, served as an ideal destination.
Two weeks ago, multinational payments firm Square showed $50 million worth of Bitcoin in its balance sheets. Before them, a public-traded software company, MicroStrategy, replaced $425 million worth of its cash reserve with Bitcoin. Billionaire investor Paul Tudor Jones also took a similar call in June, noting that Bitcoin would offer him safety against a devaluating dollar.
The last seven days also saw major financial players entering the crypto space with new services. On Wednesday last week, PayPal announced that it is going to allow its users to buy, sell, store, and spend Bitcoin via its existing services. And on Tuesday this week, Singaporean banking giant DBS launched a new cryptocurrency exchange.
PayPal joins the bitcoin space race.
+ 346 million users
+ 26 million merchants
+ 20th largest “bank” by deposits
Between them, Square, and Grayscale, it’s safe to assume that all remaining BTC will be hoovered up by public companies. https://t.co/d3oEk0LLgv
— Ryan Selkis (@twobitidiot) October 21, 2020
Bitcoin traders reacted to the sequence of good news by increasing their bids for the cryptocurrency. That pushed the price above crucial resistance levels, the latest being $13,498, Bitcoin’s highest level in 2020.
And that served as the basis of yet another pump towards $20,000. A genuine adoption spree replaced the notorious ICO boom. Here are a few tweets by leading crypto analysts that predict a Bitcoin bull run ahead.
— Brad Michelson (@BradMichelson) October 27, 2020
There are literally only two resistances left on the #bitcoin chart – 14,000 and then the old all-time high at 20,000. I fully expect new all-time highs by early next year at the latest.#irresponsiblylong pic.twitter.com/Xhp8qgHrAC
— Raoul Pal (@RaoulGMI) October 27, 2020
There are only 43 days in HISTORY that $BTC has traded above the current price.
This is the case for dollar cost averaging. You could not be down on this strategy if you tried.
Averaging into a volatile trending market is basically free money.
Just slowly buy #bitcoin.
— The Wolf Of All Streets (@scottmelker) October 27, 2020
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